BRUSSELS (Reuters) — Russian President
Vladimir Putin and the European Union's top two officials were set to
hold "clear the air" talks in Brussels on Tuesday after months of
growing tension over Ukraine and trade and energy disputes.

Instead of the normal two-day summit, the EU decided to cut out
dinner with Putin on Monday night, sending a message to the Russian
leader that it is no longer "business as usual", with relations at
their lowest point in years.

The summit will now involve around three hours of face-to-face
discussions between Putin, European Commission President of Jose
Manuel Barroso and European Council President Herman Van Rompuy,
over and after lunch.

Ukraine is set to dominate the talks, after Moscow convinced
Ukrainian President Viktor Yanukovich to turn his back on a trade
and political association agreement with the EU last November and
forge closer ties with Russia instead.

Since then, Russia and the EU have accused each other of interfering
in Ukrainian affairs, as protests against Yanukovich's decision have
gripped Kiev and other cities, the worst unrest since the Orange
Revolution in 2004-2005.

Senior EU officials have made repeated trips to Kiev to meet the
protesters and Yanukovich, who has ordered a crackdown against the
demonstrations in which at least three protesters have been killed.
EU foreign policy chief Catherine Ashton travels to Ukraine on
Tuesday.

"NEED FOR STRAIGHT TALKING"

"There is a need for a certain amount of straight talking, to clear
the air perhaps, to clarify where we think this relationship is
going," a senior EU official told reporters ahead of the summit,
speaking on condition of anonymity.

Putin's foreign policy adviser Yuri Ushakov told reporters in Moscow
it was "high time for a frank and detailed conversation, including
about our joint view of the prospects for Russia-EU relations".

"We are convinced that the potential for interaction is not being
fully utilized," he said.

In many respects, the showdown is about reordering power and
influence after the collapse of the Soviet Union. The EU's
enlargement process of the past decade has drawn in several former
Soviet states and satellites. Moscow has pushed back, and is now
trying to set up its own Eurasian customs union to rival the EU,
preferably with Ukraine as a member.

While the EU never offered Kiev membership, it was keen for Ukraine
and other states in the region to sign "association agreements",
offering enhanced trade and investment in return for adopting EU
standards of law, justice and civil liberties.

The strategy was left in tatters when Kiev spurned the EU after
Moscow tightened checks on imports from Ukraine and threatened to
cut off its gas supplies. Armenia had already opted to join the
Moscow-led customs union.

While the escalating crisis has caused alarm, Russia and the EU were
not expected to issue a joint statement and no agreements were
expected to be signed on Tuesday.

Adding to the strains are tensions over trade and energy.

The EU relies heavily on imports of Russian gas and, while that
gives Moscow a certain amount of leverage, Russia also relies on the
EU as a buyer, since other markets are not so developed.

The EU has also launched a World Trade Organization dispute against
Russia alleging that it protects its carmakers illegally, while the
EU's executive Commission is investigating Gazprom on suspicion of
hindering the free flow of gas across Europe and imposing
excessively high prices.

Gazprom could be fined up to $14 billion if it is found to have
broken EU antitrust rules.

Despite the tensions, two-way trade between Russia and the EU
totaled over 330 billion euros ($451 billion) in 2012.

EU leaders are also expected to raise concerns over human rights in
Russia, including gay rights, an EU source said.

In what was widely seen as an attempt to improve Russia's image
before next month's Winter Olympics in Sochi, Putin has freed
members of the Pussy Riot punk protest group, dropped charges
against arrested Greenpeace activists and freed Mikhail
Khodorkovsky, one of his best known opponents, from jail.